Good morning, ladies and gentlemen. Welcome to the NorthWest Healthcare Properties Real Estate Investment Trust Second Quarter 2021 Results Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded today, Friday, August 13th, 2021. I would like to now turn the conference over to Paul Dalla Lana, CEO of NorthWest Healthcare Properties REIT. Please go ahead, sir. Thank you, operator, and good morning, everyone. I appreciate you joining us today. We're joined today by Shailen Chande, the REIT's Chief Financial Officer, and Peter Riggin, the REIT's Chief Administrative Officer. Together, we are pleased to share with you our results for the second quarter of 2021. First, I'd like to point out that during today's call, we may make forward-looking statements as defined under Canadian securities law. While such forward-looking statements reflect management's expectations regarding our business plans and future results, they are necessarily based on assumptions that are subject to uncertainties and risks, which could cause actual results to differ materially. We direct all of you to the risk factors outlined in our public filings. Operationally, the REIT is performing defensively and performing well, as expected, with a portfolio that is 97% occupied by a diversified tenant roster of hospital, healthcare service, and life science research tenants, the majority of which are directly or indirectly funded publicly by their respective governments. In Q2, the REIT advanced a number of its strategic priorities, including its value creation initiatives in the U.K. to position the portfolio for a planned joint venture, advancing its ambulatory care and hospital precinct development strategies, and achieving credit metrics consistent with an investment-grade issuer. The acquisition of Aspen Healthcare for approximately NZD 38 million was a major step for the REIT in the quarter. Aspen is a hospital operator of four of the REIT's U.K. investment properties. As a result of the transaction, the REIT acquired two new high-quality assets in Claremont Private Hospital and the Edinburgh Clinic, as well as control over the operations of eight hospitals located throughout the U.K. The REIT has concurrently entered into agreements to sell these hospital operations to leading U.K. hospital operators, which are expected to close later this year. As a result of the Aspen acquisition and the ongoing sale process, the REIT has expanded its U.K. platform and further diversified its tenant base with a much stronger credit profile. In combination with our opportunistic market entry into the U.K. in early 2020, the REIT expects to generate substantial value for unitholders, which are currently estimated at more than NZD 200 million above its cost base. As the REIT executes on the final stages of its U.K. value creation initiatives, its focus is now shifting to executing on its previously announced CAD 1.7 billion U.K. JV initiative, which it expects to be completed later this year or early 2022. In Q2 and subsequent to quarter end, the REIT completed CAD 321 million of accretive normal course acquisitions and CAD 7 million of dispositions, significantly expanding its assets under management to CAD 8.3 billion, an improvement of over 21% year-over-year. The REIT continues to progress earnings and NAV accretive development projects with a pipeline of CAD 320 million currently under construction and an additional CAD 27 million of approved projects with expected completion dates between Q4 2021 and Q4 2023. Moreover, in this moment of an intense focus on the healthcare industry, the REIT has been leveraging its relationships with its healthcare operators and capital partners to participate in what NorthWest views as a key secular trend of decanting services out of hospitals. To that end, NorthWest is focused on its ambulatory care and hospital precinct development strategies and has successfully built out a longer-term development pipeline of over CAD 1 billion. With regards to Australian Unity, based on frustrating transactions completed by Australian Unity and Dexus in June and ongoing litigation around these matters to have them unwound, the REIT withdrew its previously announced proposal to acquire all of the units of Australian Unity Healthcare Property Trust at a price of AUD 2.70 per wholesale unit. Separately, the REIT acquired an additional interest through its premium cash offer of AUD 2.70 per unit, which now takes the REIT's holdings up to 17.3%, making it the largest unitholder in Australian Unity. The REIT is actively considering next steps with regards to its investments in this entity. Another key priority advanced during the quarter was the continued debt optimization with the goal of achieving investment-grade credit metrics. In the quarter, the REIT completed a CAD 201 million equity raise and post-quarter closed a further CAD 25 million private placement to NorthWest Value Partners on the same terms. Net proceeds of the issuance were deployed toward the previously announced acquisition of Dutch Medical Office Buildings and the repayment of higher cost debt. In May, CAD 61 million of the CAD 75 million Series E convertible debentures were converted into equity, with the balance redeemed with existing liquidity. As a result of all of these initiatives, the REIT's proportional leverage declined 110 basis points quarter over quarter to 49.6%. The REIT's balance sheet continues to present organic deleveraging opportunities through the expected conversion of CAD 80.5 million of in-the-money Series F debentures maturing in December 31st, 2021, which have a conversion price of CAD 12.80 per unit. Pro forma completion of the private placement, full conversion of Series F debentures to equity, completion of the U.K. portfolio repositioning, and seeding of the planned U.K. JV. The REIT's pro forma consolidated and proportional leverage would further decline by approximately 860 basis points and 920 basis points, respectively. ESG initiatives also remain a key strategic priority, with the REIT being committed to issuing its first ESG report in 2021. The REIT believes that ESG issues have played an important role in defining its past and will continue to do so in the future. Our global cross-functional team, led by the REIT's Chief Administrative Officer, is advancing this important aspect of its business, including completing its inaugural submission to GRESB, a leading real estate benchmarking provider. For the quarter, all results are in line with expectations, with annualized quarterly adjusted funds from operations of NZD 0.92 per unit on a normalized basis, implying a payout ratio of 87%. Earnings accretion from recent investment activity and financing activity was as expected, although the appreciation of the Canadian dollar over the past year relative to the REIT's average foreign currency exposure was a slight drag on earnings. On a constant currency basis, AFFO per unit was up approximately 9% year-over-year, which is particularly notable in the context of the REIT's de-leveraging activity. In the context of a lower Canadian interest rate environment, we expect asset headwinds may begin to ease and then align over the balance of 2021, providing a further tailwind to the REIT's future earnings. Net asset value was up 6.3% to CAD 13.14 per unit this year, driven primarily by strong revaluation gains in Australia and a rebounding Brazilian real. With significant demand for long-leased inflation-indexed assets and increasing interest in healthcare real estate in particular, we see near-term potential for a continued cap rate compression across our markets, leading to meaningful valuation increases in the near term. Combined with our U.K. value creation initiatives, expansion of the global asset management platform, and a growing development pipeline, we see the potential for a further CAD 2 per unit in NAV increased in the short to medium term. Before turning to operational results from the quarter, I wanted to briefly speak of some of the trends we are seeing across each of our global markets. Investment activity is at all-time highs, with institutional investors jockeying to rectify limited or underweight positions in healthcare real estate. More than that, we continue to see significant capital formation around healthcare real estate and premium valuations being ascribed to these platforms across Australia, Europe, and the U.S. Collectively, these macro themes are driving pricing in our sector, which we are beginning to see high-quality assets in core markets trading into the low 4% range. All that to say that while we have already booked substantial fair value gains in Australia and New Zealand, we continue to see significant scope for further cap rate compression across our portfolio. Combined with several value-add initiatives focused on portfolio repositioning and development strategies, we expect to continue to deliver meaningful NAV growth in the near term. Operationally, our results, which are derived from a 190-property, NZD 8.3 billion healthcare infrastructure-led portfolio tenanted by leading operators on long-term inflation indexed leases, was on plan. The inherent strength of this portfolio is reflected in the REIT's operating results, with year-over-year constant currency cash recurring SPNOI growth of 2.9%, again, largely driven by contractual rent indexation and underpinned by 97% occupancy and a weighted average lease term of more than 14 years. For the three months ended June 30th, 2021, the REIT collected just under 99% of its rent, which is 20 basis points up from the last quarter. In all regards, a highly defensive portfolio. Segmentally, I note the following. In Brazil, we are on plan with steady 100% occupancy and a continued strong year-over-year source currency SPNOI growth of 4%. Operationally, the REIT's major tenant, Rede D'Or, continues to deliver exceptionally strong results and expand its business, thereby creating potential opportunities for future partnerships with the REIT. The REIT is also focused on getting traction with additional high-quality operators in Brazil and sees a very constructive market currently. Canada performed satisfactorily during the quarter with stable portfolio occupancy of 92% and adjusted year-over-year source currency SPNOI decline of approximately 1%, mainly driven by higher payroll-related costs. Leasing activity during the quarter involved 50,000 sq ft of new leasing and 68,000 sq ft of renewal leasing completed. Spread on renewal rents during the quarter was up 6.5%, with rent collection remaining strong above 98%. On the investment front, the REIT acquired its first life science asset in Canada for NZD 15 million at a weighted average capitalization rate of 6.1% during the quarter. The property is located in close proximity to Montreal's Technoparc and is 100% occupied on an 11-year weighted average lease term. The REIT completed the sale of one non-core MOB for an aggregate sale price of NZD 7 million during the quarter. In Europe, we were on plan and performing as expected with year-over-year source currency SPNOI growth of 1.8% and occupancy at 96%. In Europe, the REIT continues to execute on its growth agenda by developing strategic relationships in both the medical office and hospital segments, which continues to translate into accelerated deal flow. In addition to the U.K. value creation initiatives previously mentioned, the REIT completed the acquisition of its previously announced portfolio of four on-campus Dutch medical office buildings for NZD 176 million at an average capitalization rate of 5.1%. Last, in Australia, the occupancy remained stable above 99%. With constant year-over-year source currency SPNOI growth of 3.2% and a weighted average lease term of more than 16 years. At Vital, the business reported similar results with year-over-year SPNOI growth of 6% and occupancy again at 99%, with a weighted average lease term of more than 19 years. As manager of Vital Trust, REIT completed the acquisition of a large rehabilitation and mental hospital located in Camberwell, Australia for NZD 68 million at approximately a 5% capitalization rate. Began new greenfield development in Princess Alexandra Hospital Precinct in Brisbane, Australia. I'm pleased with the progress made during the quarter, which advanced a number of the REIT's key long-term strategic initiatives, as well as producing solid operating results despite the COVID-19 environment. With deep relationships, best-in-class regional operating platforms, and a strong access to public and increasingly attractive flip price private capital, the REIT is better positioned than ever continue to execute on its strategy. I will now ask the operator to open up the call for questions. Thank you. Ladies and gentlemen, we will now conduct the question and answer session. If you would like to ask a question, please press star one on your touchtone phone. If you would like to withdraw your question please press star two. If you're using a speakerphone, please lift the handset before pushing any keys. One moment for your first question. Your first question comes from Frank Hsu, BMO Capital Markets. Please go ahead. Thanks, operator and hi, everyone. My first question comes like, I saw you guys completed acquisition of the life science asset in Canada, and as we can tell, after COVID, it's a kind of awakening call to the life science sector and the government are committed CAD 2.2 billion in funding the life science through COVID. I wonder on this point, do you guys expect to be part of the game or to maybe just improve your presence in the life science in Canada, either through buy or build? Hi. We absolutely do. We're active in the life sciences space in all of our markets in varying degrees, but it builds very much on one of our core investment themes, which is our precinct investment theme. We have active projects queuing and under review in all of those markets. Some of it buy, some of it build. We expect to have further announcements on this. It's a meaningful opportunity, but it's not limited expressly to life sciences. We do see this precinct opportunity offering a whole range of opportunities for us to grow and build on. I might call out, in Australia, some recent examples which have come out. You may have seen that we reported Vital's results, I guess 24 hours ago. We would've called out their three or four specific projects that have upwards of CAD 1 billion of potential development in precincts, including life sciences, hospital, and outpatient opportunities. We see a real continuing opportunity to build on our key strategies in Australia and New Zealand as an example, but certainly, increasingly in Europe and in Canada, pursuing these initiatives. We're quite active in the business. Overall, I might call out maybe that the business in advancing these initiatives is looking to position the overall investment to between 10%-15% of the business into value add or development activities. I think we see increasing visibility on that pipeline. We've been working hard in all our markets on these initiatives, and so we're starting to make some real progress there. Most of this is in conjunction with our existing capital platform, so it gives us a very attractive way to both invest in and earn fees and related revenue, bringing these projects to completion. We are quite excited about that initiative and really it's been a longstanding objective for us to grow and build on. Okay. Thanks, Paul for the great color. In this quarter, we're kind of turning to the fair value side of your IPP. I saw you recorded a very sizable fair value gain in this quarter. I wonder, especially in the Vital Trust, I mean, what has been changing in that market that drive this the fair value gain recorded in Q2? Maybe this is a question to Shailen Chande. Hey, Frank. Yeah, I'm happy to speak to some of our cap rate trends more generally and Paul can speak to some of the transactional investment momentum. More generally, our IFRS cap rate came down about 20 basis points quarter-over-quarter, 5.6%-5.4%. You're correct, quarter-over-quarter, the primary change came out of Vital, which was about NZD 200 million or so over the quarter on a consolidated basis. Year-over-year, Vital has presented about a 50 basis points compression in its overall weighted average cap rate. It is a trend that we are seeing in the market more broadly. I call out that as we know under IFRS cap rates, it tends to be a bit of a trailing indicator. Perhaps not as up to date with what we're seeing in the current investment markets. Per some of Paul's introductory comments, we do see continued scope for marks to our IFRS cap rate, primarily coming out of Europe as well as continued compression in Australia. Paul, I'm not sure if you'd want to add any color around the investment market to perhaps substantiate that. Yeah. I think, again, maybe Shailen putting that in context, we've guided previously to seeing 50 basis points in our total portfolio over the balance of the year. I think we're through 20 in this quarter, and we see the balance coming certainly over the next couple quarters, a good chunk of that, as Shailen said, coming through continued cap rate compression in Australia, New Zealand, and Europe, and as well, the U.K. JV initiatives, which I mentioned. A lot of that is quite visible and coming quickly. We're quite confident in that overall outcome in the near term. I would say, though, that the trends that we're seeing in our space for the highest quality assets, the infrastructure-like assets that we substantially own already, are really starting to converge on the themes we're seeing in the industrial space, as an example. While we've been guiding into the low four for some of our best quality assets, I really think that that's going to start to have a three in front of it quite quickly. The trend is very pronounced and obviously, something that benefits our existing portfolio significantly. We've been relatively conservative to date on these numbers, despite their size and noting that these are big movements on a big portfolio, but we see a lot more to come. Obviously, we're equally focused on making sure how we position the business both to acquire and increasingly to develop assets that we can do things accretively in. We have all of our funds and JVs set up that give us leverage and a very low cost of capital to pursue opportunities in this type of environment. We think we're well positioned there, reminding everyone that we have approximately NZD 5 billion of debt and equity capacity in our existing JVs to pursue these strategies, plus Vital, which is an evergreen constant capital vehicle. We really are starting to see some of the value add and development initiatives that we're pursuing coming in that mid-fives to mid-sixes types of returns. Quite positively accretive to what's available in the sale leaseback market, which is incredibly competitive. Of course, our overall strategy has been to be a broad real estate partner of choice and deliver a bunch of services more than straight capital. We see the business positioning itself to really be able to leg out that strategy on the ground in all of our regions, and so really capable of delivering value-added services to our tenants. That puts us in a really positive situation. Recently, for example, in ANZ, again, we've had a very strong partnering relationship with one of our bigger tenants in the portfolio, Epworth. We've completed the acquisition of Camberwell, which was one of their outpatient clinics in Melbourne. We've also just come to heads of terms on a strategic partnering relationship with them that will see us acquire interests in two of their biggest hospitals, as well as commit over the next 10 years to upwards of NZD 1 billion of development with them in expanding these big hospital campuses. We're able to position the business with the best partners as a strategic partner. That has the opportunity to joint venture with them on these assets on a 50/50 basis and grow the portfolio together over time. We've had a 25-year relationship with Epworth, predating NorthWest's involvement in the business in Australia. It speaks well to sort of the strategies that we have that allow us to build on these partnering aspects and really grow the business, both through acquisition and organic development over time. We're really starting to see that pipeline and those opportunities build nicely. There are similar initiatives underway in our hospital portfolio in the U.K. and in our outpatient rehab clinics in Germany. I'd call out the MOB acquisition that we did this past quarter in the Netherlands as a great example of buying a set of purpose-built buildings from the hospital operator, and we're now in the middle of the campus of Albert Schweitzer in the Netherlands, one of the top operators. It gives us a real opportunity to help them grow and evolve their campus over time. It's the first transaction of this type in the Netherlands, so it also gives us some technology to allow us to talk to the other hospital operators in the Netherlands and offer them similar on-campus real estate solutions. We really see this part of the business evolving nicely, and I'm quite excited about the potential for it over time. That's a lot of great details. Thanks, Paul and Shailen. In addition to that, I want to circulate back to AUHPT a bit. On your MD&A, I saw you guys announced the premium cash offer, and also you mentioned the put and call arrangement to acquire 10 million units at AUD 2.70 per wholesale unit. Following that, you guys said anticipate to close the purchase of units by the third quarter of fiscal 2021. My take is this- The premium cash offer, definitely that closed in Q3. Do you also expect to exercise your put and call arrangements in Q3 as well? Could be Q3 or Q4. We have flexibility there, but yes, we do expect to exercise them, and we have an effective interest of 17.3%, again, making us the largest investor in the business. That consortium includes our JV partner, so we have a strong capital relationship there to achieve that. Again, we're very much looking down the road from there. Okay. All right. That's all my questions today. Thank you very much, Paul and Shailen Chande. I'll turn it back. Your next question comes from Fred Blondeau of iA Capital. Please go ahead. Thank you. Good morning. I was just looking at your same property NOI. I was wondering if you could give us a bit more granularity on It looks like you're doing extremely well with Vital. I think you gave us a good color this morning. Could you expand a little bit more on what's going on in Australia, what will be the drivers there? It looks you're seeing a little bit more pressure, at least last quarter in Europe. A bit more color on the drivers in these areas would be much appreciated. Thank you. Shailen, maybe I can take a stab at that in Australia. Our portfolio in Australia and New Zealand is 100% indexed and 99% occupancy. The math on SPNOI is pretty direct drive. We do have a number of our leases that have fixed floors of 3% or 3.5%, sometimes, the growth rates there are above inflation. It's inflation plus, I would say, through the portfolio. By and large, the bulk of the portfolio is indexed to local CPI. That's a bit Australia and New Zealand, and again, at 99% occupied, it translates pretty directly in both directions. We like that part of the business. Europe has that combination of both MOB and long-term leases. All of the long-term leases in our rehab and our hospitals, of course, are indexed in. It's a bit different in each market. Germany is CPI indexed. U.K. hospitals have typically a collar, a floor between 2.5% or 2% and 4.5%. We get a minimum of 2% or 2.5% and up to 4.5%, depending on the lease arrangement there. In the MOB portfolio, it's probably on average about three-quarters of CPI that we would get through our leases in the MOB portfolio. I think taken in combination, you get a bit of a driver there that's pretty close to being inflation-based. Of course, inflation in Europe is lower than in our other markets, including Australia. We've been seeing that growth in the 1%-1.5% range translating. We also have, again, in the MOB business, a business that more closely approximates Canada. There certainly is leasing and some elements of operational performance coming through that business. It's a bit of a stew, but ultimately, increasingly getting closer to CPI base, but not quite as far as Australia, New Zealand or Brazil for that matter. That is great. Thank you. What would be your views for the second half of this year and next year, looking at New Zealand and Australia and Europe as well? Yeah, I'm a bit reluctant, Fred, to make a call on inflation, to be direct to the question, I guess. I think the great news about our business, though, is that we have pretty direct drive pass-through into our leases, as we've just talked about. More than 75% of the business has direct inflation adjustments or better. I think we're well protected in the rising environment for some inflation. We've been guiding, maybe Shailen, I'll let you talk to what we're forecasting for the balance of the year, but I think we've been pretty consistent in that 2.5% to 3% SPNOI NOI range across the business. Again, anything different than that would come out of a higher inflation environment, which we are hearing a lot about, but it hasn't yet translated, and maybe some of the immediate shock of all this reopening is abating, and things are restoring themselves to a little bit normal level. I'd let Shailen carry it from there. Yeah, thanks, Paul, and hi, Fred. In respect of SPNOI on a global consolidated basis, on a constant currency over the quarter, year-over-year, we posted 2.9%, or roughly 3% constant currency SPNOI. That's been a fairly consistent run rate for the business. Looking into that 3% NOI and circa 6%, or just under on a levered basis is how we see that tracking through the numbers. That's been our historic track record, and I'd say a fair marker going forward. Fair enough. Thanks very much. Your next question comes from Tal Woolley of National Bank. Please go ahead. Hey, good morning, Paul. Good morning, Shailen. How are you? Well, thanks, Tal. Yourself? I'm doing okay. I apologize if there is any noise. My next door neighbor in my condo is doing renos. If it sounds like the walls are caving in, it is only because they are. I wanted to start just with Australian Unity. Are you a happy passive shareholder now in Australian Unity? Absolutely not. I think, again, we haven't changed our stripes overnight, Tal, we do things for a reason, and we take a long view to it. What I will say, though, is that clearly as the largest investor in the trust there, we have a very strategic and very valuable stake, and we accept to use it to maximum advantage as we look forward. I can't talk more than that, I think you know us to have a long-term objective in mind, we categorically do here with our partner who has an equally long-term view. Nothing about the windy road of Australian M&A is unexpected here, this will be a multi-phase initiative for us. Okay. One of the things I've sort of wondered about when I've watched the moves over time that you guys have made to increase your exposure there is that there does feel to be a bit of a leverage arbitrage between what's sort of tolerable here in Canada and maybe what is sort of natural practice in Australia. That feels like it's part of the potential upside for a new buyer. Do you expect to see them start taking up their leverage as a result, like seeing more of these maybe bigger funds that are kind of relatively more unlevered, taking up their leverage as a result? There's lots in that. Again, I think other than tactical things related to the specific situation, which I won't speak to, what I can say about Australia and New Zealand in general, and you see it in our Vital business as well, is that it is a lower leverage environment than Canada traditionally has been. Although, I'd let Shailen talk a lot about the direction we're driving in. A lot of that comes out of the recent experience in the GFC there in 2008 where that was very impactful in the listed environment and unlisted environment for trusts. We see lower leverage in that part of the world in general. Obviously, we have different approaches to it. In the context of our public sub Vital, we have a sub 30 kind of leverage focus right now. That's consistent with the market, probably consistent with the tight end of the market, maybe in Canada and the U.S. as an example, but certainly expected in the Australian-New Zealand context in the listed environment. Our JV with our large institutional partner is very different and has a very different leverage fluency. One of our great advantages is being able to use that, and it gives us an effective cost of capital in things that we may do. I think there's different answers to that question and a bit horses for courses. If you had to generalize across Australia and New Zealand, I would expect that just given the typical listed and larger unlisted vehicles would be in the 20s in terms of leverage would be pretty steady state there, which would be, I think, very much at the low end of the North American market by example. Okay. Also wanted to talk about the Canadian portfolio. Sort of a different question. Do you know within your tenant base for the medical office portfolio, like roughly how much of your exposure is to GPs versus specialists and other types of tenants? I might benefit by having Peter comment on that. Not to put you on the spot, Pete, would you have that at hand? If not, we do, we just would have to pull it out. Yeah. Thanks, Paul. Good morning, Tal. Yeah, we don't have that at hand. We can definitely pull that out for you. What's behind the question? Maybe we can get to that. No, I can certainly go on to the follow-up. I think one of the things I'm sort of increasingly hearing from retail landlords in this country is a desire to get more medical uses into malls. They see themselves as having a lot of things that feature for consumers. A lot of other shopping alternatives that drives a lot of traffic. It's free parking. You just had this morning, Loblaws announced another, I think, 6 GP clinics that they're going to be opening up in Shoppers. It's early days, I'm just saying this appears to be a focus for another asset class, is to maybe kind of drive your tenants in a different direction. I was trying to get an idea of what you were thinking about that and how much Because I would say probably the GPs are the easiest to kind of shift into that environment. If you're a specialist with different things, it might be a little bit more challenging to make that move. Yeah, you're right. There are all different types of medical buildings, both here in Canada and in Europe. Some are GP-focused, some are specialist-focused, some specifically related to nearby hospital infrastructure. There's no one brush that cuts it. In terms of the competition, be it from retail centers or from the likes of Shoppers and what have you, we've been dealing with that for the better part of the start of the portfolio. That's nothing new to us. Right. We continue to believe that it's more than just space, that it's synergy within the building, it's services offered. It's just how they're treated as a tenant. Obviously, we'll always continue to watch competition in micro markets, but it's nothing that's throwing us off course. As I say, we've dealt with it for well over a decade. Okay. For Paul, you've obviously spent a lot of the last several years building out the international portfolio. If we talk about the, maybe not the life sciences piece, which you're just kind of starting here in Canada, but just that core medical office business, are there any sort of interesting opportunities that are coming about? Because you have been kind of trimming the portfolio around the edges, or should we just continue to sort of see it as the stable kind of cash flow based on which you're building kind of the rest of the business? Maybe I'm not sure I fully understand, but maybe I'll try and pick up on a couple thoughts that are on my mind around portfolio management. I think the business, Tal Woolley, as you mentioned, has matured and got much more sophisticated over the last, since 2010 when we listed it, and 2004 since we started it. I think we have an increasingly sophisticated capital allocation, thinking about what's good and what we like and what we're good at doing. I think we're in a continuous moment of optimizing and evolving our portfolio. I think the big trends, again, if I try and come back to Canada, which we all know best, we know that we still continue to have a very stylized healthcare market in Canada compared to the rest of the world. That obviously has informed our thinking about where to go and why we didn't just get on the planes because we wanted to fly. We went there because we thought we could get better quality and better returns, and I think that's been proven out over time. I am quite constructive on Canada. Again, it's being dragged perhaps a little bit unwillingly to the altar of healthcare innovation and change. We are starting to see the bigger trends come through the business. It's still going to be slow compared to more dynamic markets like Australia, where we have a private sector that's very reactive and responsive. Nonetheless, the big trends are still happening. The big trend, oddly, to talk about ambulatory and outpatient in Canada, it's a funny big trend because it's been in existence for 25 years, and yet we have almost none of it. This COVID has been an absolute accelerant to this trend. We're active, as you know, in Lakeridge and other outpatient ambulatory development opportunities. Those start to have the features that we like in terms of, again, larger creditworthy tenants in the government itself or the hospital operators, as well as the long-term leases, much more higher acuity procedures happening in these facilities compared to MOBs. That trend is starting to become pronounced and all of the provincial governments are in big dialogues around how they evolve their facilities use. Just given that they're not necessarily directly on campus and physically attached to the existing hospital, it really offers NorthWest a much bigger opportunity set. That's quite a pronounced trend that we see happening. That trend also will help what could happen in medical office buildings, of course. We have a lot of space that can be repositioned to deliver clinical outpatient services, whether it's dialysis or whether it's even day surgery or other types of uses in the hospital, which are becoming less core as a hospital will shift from all this COVID capacity to really much higher acuity things that are happening in hospitals. We see that happening. We also see in our MOBs, and as Peter mentioned, through the 15 years we've been doing this, there's been quite an evolution to how practices think. Clearly we've been at the forefront of thinking about group practice and ways to accommodate both GPs and specialists in more flexible, nicer settings, that trend is happening. That's a continuing trend, gives us some opportunities to deliver high-quality things to people. Those are some of the things we see a lot of. Obviously, when we get into the broader precincts and we get into that combination of research and healthcare and education, we see the constellation of those three things as being really the drivers of these big precincts and these big opportunities, we're super focused on that, obviously. When it comes to development, we're quite cautious, and we're looking for all the good things that you would have. Our industry offers us the great opportunity to do a lot of pre-leasing, if not 100% in many cases. We will find ourselves into arrangements with on campus or in precinct that we'll have some neat opportunities. Those are our sort of highest conviction themes. That precinct theme, the outpatient ambulatory theme, and then of course, MOBs around that play a really important role. They're facilitating a role to the broader delivery of healthcare. If I were to paraphrase, it would be like, there's good stuff ahead here in Canada. It's just that it's going to go at the speed of government, it's not going to go at the speed. Yeah, that's fair. To contrast that, some of the most asset-heavy healthcare operators in our other markets, private, let's say to start, are becoming very much crossing over that non-core bridge as it comes to their real estate and really opening up big portfolio opportunities as well as, okay, all the how do we expand and evolve it. At the same time, what's going on in healthcare is that the operators are making huge investments in other areas like IT, like in people. There's just a real transformation happening in healthcare. There's only so many dollars, and real estate is something that they can control and have great arrangements, long-term arrangements through leases. They don't need to have all their capital in real estate, and they need a lot of capital to grow and evolve their businesses, which are experiencing huge demand. That's kind of the theme and, yeah, as we know, governments approach those big themes a little bit differently. I think Canada's changing. I'm an optimist and a believer in what we do here. There's been a lot of good articles recently just in the paper around these issues of really needing to evolve the system. It's not going to be exclusively, let's say it won't be done exactly as it's been done historically, which I'm confident to say today. It's taken a long time to get there, and a big push in terms of COVID, but we're very much in that moment. Do you have a lot of excess or sorry, I don't know what the site coverage is like for your Canadian portfolio. Do you have opportunities to sort of increase the density on some of your medical office sites, maybe for some other uses beyond medical office? We've been looking in our portfolio for a while now for expansion opportunities. Probably two big themes that would follow REIT land in general. I think one's are more urban densification. We've been focused on a series of value unlocking initiatives around excess density in our most core properties. We have stuff all around the city of Toronto as an example that has the next 50-story thing on it. We're working through that. It's not healthcare. Obviously, the things that are close to the things that we like when the portfolio has been very positioned to see properties near or proximity into hospitals or significant research nodes. We're very focused on looking at opportunities to expand and grow our businesses there. I'd just maybe call out, for example, we own 149 College, which is across from University of Toronto and right in the MaRS Discovery District. We're looking at a very significant opportunity there to grow and expand that building. That itself could be a CAD 500 million project very easily, in conjunction with some of the biggest partners in the industry. There's a bit of a range, but the answer is categorically across the portfolio in all jurisdictions, we're looking for logical ways to expand. My comments when in the introduction were really meant to say that the business which has historically had sort of CAD 300 million of active developments going on is probably going to treble that over the near term in terms of going forward, and we see a very attractive opportunity set. Getting that right, managing execution on those things is going to be an increasing part of our business. We've consciously set out to do that because we have good land, but because also our partners are looking for new and expanded opportunities. There's a lot in that, but I'd say yes, and yes. Okay. That's great. Thanks so much, Paul. Thanks, Shailen. You're welcome. Your next question comes from Mario Saric, Scotiabank. Please go ahead. Thank you. Good morning. Paul, I just wanted to delve into a bit more detail on your CAD 2 potential NAV upside in the near term. How would you break that down between cap rate compression, the value add with the U.K. venture, then potentially development upside? I ask just simply because I don't know how much of the CAD 200 million of U.K. venture value creation above cost is currently in the IFRS today. Yeah, I'd probably let Shailen bring some precision, but I like to get checked online here, Mario, so let's see if I get this right. I'd say 50% U.K. value creation and 25 each to the other two components. Am I close on that, Shailen? Yeah, I think that's fair. Maybe the clarifying comment I'd give, Mario, is that specifically in respect of the U.K. and how much of that is already in our IFRS value, given that the majority of our U.K. portfolio has been acquired over the last 12 months, it's essentially being held at cost. We haven't taken any material marks to our U.K. portfolio, and the value creation is to come in respect of our IFRS marks. Perfect. Okay. Operationally, Australia's had some more recent challenges with the Delta variant. Can you highlight any changes in rent collection or requests for rent deferral and things along those lines within your portfolio in the past couple months? Yeah, I'll take that one, Mario. Let's remembering that Australia might have 500 cases in total. That regime is in a very different approach to COVID than we are. What hasn't happened, I think, other than in the very early days of the first wave, is there's been any capacity constraints or restrictions on elective procedures as the industry would call it. We're seeing all of our partners operating at substantially full capacity and no limitations on what they're capable to doing. Of course, the demand side of that came back instantaneously. As we know, healthcare is pretty inelastic when it comes to demand. Right now across the world, but including Australia and New Zealand, zero impact from this moment and none expected, frankly, I think unless things get dramatically different. Perfect. Okay. It seems like there's never a dull moment with you in so far as there's a lot of opportunities globally with the expansion of your asset management franchise over time. You mentioned Australian Unity and that perhaps being kind of a multi-process step that could take a bit of time. When we sit back, how do we think about the sequencing of Australia and kind of deploying that excess capital that you have with your institutional partner, the U.K. venture, the potential entry into the U.S., and then any potential structural changes in Brazil and in Canada down the road? Is there enough organizational depth to be able to do all that simultaneously, or should we think about it one step at a time, and if so, how should we think about the sequencing of that over the next two years? You must have been around the bar table yesterday because that is the question. I think you're absolutely right. Our issue for sure is not opportunity. It's getting the sequencing right and phasing it. I think we do have some very core, strongly held beliefs, and I've mentioned them again very much around these long-term cash flows, mentioned them around precincts and the ability now to add value add and development. As an example, the reason we like Australian Unity as a business is that it emulates many of those core things that we do and we like, and it has complementary geographies and relationships that fit within our strongly held beliefs. It's highly aligned, and we think about it in a very long-term, calculated way. More importantly, I think of all of those initiatives, I think the business is probably capable of doing two or three of those things at any given time. The business is much broader than it is. Increasingly got very strong regional capabilities. We've spent a lot of time and energy building our platforms. Of course, we need to get the staging right and the timing right through the capital markets. Clearly some of the capital we use, we like to redeploy. We're not doing everything on top of each other in that regard. Again, I think we're more capable than ever of doing multiple things. I think I would just say that we're very mindful of making sure that we get things right in the right order. I'd call out, as we know, we've been talking a lot about the U.K. JV over the last 12 months. Obviously, we came to a very strong conclusion that getting the value enhancement pieces of that portfolio right was the right thing for the business. We paused the JV to facilitate that. We're on the five-yard line or maybe the one-yard line of that initiative. The next step will move quite quickly as an example. I realize that we've been talking about it for a bit. We've made a ton of progress in executing on what we've wanted to do. I will say in this one, in any event, it's ended up better than where we thought, probably double what we thought we were going to be able to achieve in terms of value enhancement. With that comes new relationships and new opportunities as well, which will be on the horizon. I think for a business as an example that entered the U.K. opportunistically that's going to make somewhere between a 40%-50% IRR on its initial investments internally, all for the REIT seed a new JV and establish a multi-set of relationships with the top operators in the U.K. and a number of different opportunities. We're super happy with that outcome. It would have been great to be done 90 days ago, but we've taken the long view to get the underlying fundamentals right and to deliver on things. As an example, we've been able to do that at the same time as all of our U.S. exploratory work. Again, we're not quite to the point of taking an investment decision there, but we're working hard at it. We do expect news later this year, all the while moving the business in Australia and New Zealand into a very active set of both growth and we'll call them strategic initiatives. I think we're capable of doing things, and the business will always have to say, weigh in what order it does things. Again, I think over time we've gotten better at doing that. Understood. When we think about your equity needs to accomplish these initiatives, presumably acquiring with your consortium partner 100% interest in AUHPT was perhaps the base case. I'm not sure if that's the base case going forward after the multi-stage process or not. When we look at Australia, the seeding of the capital or the seeding of the assets in the U.K., and then potential initiatives in North America, given where your balance sheet is today, are you comfortable that you have all the necessary, or you will have all the necessary required equity to kind of execute on those initiatives going forward? Yeah. Of course, I think over time, this is a growth business, and we probably see in the medium term doubling the size of the business quite comfortably. Of course, in that context we will need equity, both JV and otherwise. In the near term, I think with the U.K. JV coming quite quickly, I do think we see a very adequate amount of equity for the things that we have underway. Again, noting that most of the bigger things are coming through our capital arrangements, either in Europe or in Australia, where we're putting up par dollars and behind, in some cases, very attractive leverage. From that perspective, I think in the near term, we feel pretty good about where we are. The other side of that equation, of course, is leverage. We are quite committed to be in a decreasing leverage environment. We've done good steps this year around that. As Shailen noted, we're certainly looking at somewhere between 750 and 1,000 basis points of additional de-leveraging coming in a few different ways. I think all of that is the tension of the business, but I do feel that it's adequately capitalized in the near term. Certainly, we went early this year a couple of times to make sure that was the case with visibility on a number of big things. Beyond that, of course, there'll be more to do, we'll have to get the sequencing of that right, too. Understood. Okay. Your comment on development or value add initiatives representing 10%-15% of the balance sheet over time, is that on a consolidated basis, or would that represent your proportionate interest or NorthWest's proportion interest in those initiatives as a percentage proportion of balance sheet? Yeah. I'll let Shailen correct me, but I think both actually, Mario. I think Vital's already headed in that direction. You'll see from the recent releases there, that we've got a very attractive advanced pipeline there. Galaxy and our JV in Australia is not far behind with some very big initiatives and obviously funded for the long term to get that sort of thing done. I think across the rest of the organization, we have some catching up to do. There are a number of meaningful initiatives underway, so it's not going to start at 15. I think what we said probably 18 months ago, just leaning into 2020 when we looked at the business and said we have a lot of strategic land. We have a lot of partners that want more than just straight sale leaseback capital. They're looking for new and different and real estate help. We need to position the business in this direction. That's something we've been working at now for 18 months, and I think now it's just getting meaningful enough to talk about specifically. I feel like we're partway along the path, and it's going to take another 12 or 24 months for it to start to be more pronounced in some of these other geographies. To maintain CAD 1 billion of value add and/or development constantly in the business as a near term objective is a meaningful thing to talk about. I think we see ourselves able to do that, and we see the business, again, well capitalized through its capital commitments to accommodate that type of activity. Then we're super focused on making sure that we can do it for not just an initial suite of projects, but over time. I think that's one of the nice things about our industry where when, particularly in the precinct strategy or ambulatory strategy, they tend to come in multiples or phases. Once you get started, we have reasonably high visibility on the phase I, II, III, IV, V type situations at many of our sites, and that gives us a nice staged opportunity over time to pursue projects. These are big campuses with lots of different types of uses. Some of them are bite-sized, some of them are bigger and have the usual pre-leasing or varied set of arrangements that you need to make it work. It's going to be a little bit of everything in all directions. Coming back to these core strategies and beliefs. We've always been a major market player. We've always been a larger asset player in conjunction with precincts, in conjunction with other infrastructure. Those are our big themes, and of course, we're always a partnering player. Where we have a partner like Epworth as an example, where they have a very varied set of needs, we're looking to provide all those needs over time, and we're able to do that. Those are some themes that are in the business, and I just think maybe what's changing is just the pace of those things coming because the healthcare industry, I think, is changing very quickly. We're seeing in the U.S., as an example, multiple major hospital operators looking to exit their own campus MOB real estate. Again, coming to the conclusion that owning real estate assets is not core for them. Really nice opportunities that marry up with themes that we like in other parts of the world as an example to things that we're seeing, and we're seeing that around the world. Just maybe one more quick one from me. In recognition of the time, the good with development is longer-term NAV per unit growth, longer-term AFFO per unit growth, better quality portfolio. The bad in the near-term is there is no income that is near-term dilutive. As development becomes a bigger part of the story, how do you balance those two, and do you have a medium-to-long-term AFFO per unit growth target that you want to achieve? Very carefully, I think is the right answer. Given that a good percentage of the development will come through our JV or permanent capital arrangements, we're putting up, in those situations, 30% or 25% of the equity against leverage. That may be, again, and we will average out, but certainly 50%-60% in the types of projects that we do that are substantially let and substantially fixed contract or very limited cost risk on those projects. The actual equity dollars to NorthWest are relatively small, and we have very attractive development fee arrangements with all of our arrangements. I think we're able to offset any small capital drag, if you can think of it that way, on earnings with very attractive fees and earnings around development management, leasing, and ultimately asset management. We think it's a pretty acceptable mix. I would say that we probably still see it on the accretive side of the ledger, but I might let Shailen speak to that just to get his lens on that. We're talking about $0.05-$0. 10 cent dollars on these projects, not $1, and we're talking about meaningful fees against that, particularly well projects under development. Got it. Okay. Just maybe the second part of that question, Shailen talked about structurally 3% same-store NOI growth. You have a very prolific global asset management business that layers on incremental fees. If your three to five-year business plan goes according to plan, what type of targeted AFFO per unit growth do you think the company unit standpoint can achieve? Great question. Do you want to start with that, Shailen, or would you like me to try? Yeah. Paul, happy to put out some thoughts. Mario, I think we do have a great slide on our investor presentation, actually. Slide 13, I would refer people to, but it's what I like to call our business model slide. At that 3% unlevered SP NOI growth levered, you look at about 6% there. We believe our asset management business and the nature of our fee structures brings about a 350 basis points premium growth to that. Through some of the development, which is becoming increasingly important in our business, and forecasting around that 100 basis points spread between stabilized and development yields, we think that brings an extra 30 basis points- 50 basis points. All of that would bring us to a core 10%-12% stabilized AFFO return and growth rate. Okay. Leverage neutral, currency neutral. Yeah. Okay. Thanks, guys. Thank you. Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star one. There are no further questions. I will turn the conference back over to Paul Dalla Lana. Please go ahead, sir. Thank you, operator, and thank you, everyone. That brings to conclusion NorthWest Healthcare Properties Q2 2021 call. Thank you for your involvement and attendance today. Have a great day.